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land and of horses. In general, all these measures suggest the tendency
to economic collectivism of modern days.

The state capitalist enterprises began in July, 1069, with the establish-
jftg of a bureau for national or interprovincial wholesale trade. Con-
vinced of the great profits to accrue to the government, the Emperor
allocated a sum of five million dollars in cash and thirty million
bushels of rice as capital with which the government would take over
the interprovincial trade in goods and raw materials. Immediately this
system ran into practical difficulties. In February of the same year a
bureau of economic planning was established, charged'with the duty
of studying the plans and programmes before promulgation. Among
the staff of the planning bureau was Su Tungpo's brother, Tseyu. In
his memorandum Tseyu pointed out that when the government took
j^fer the national trade, free enterprise would at once be paralysed, for
"local dealers would be handicapped in competition with the govern-
ment. It was inevitable that the government and the business-men
would be treading on each other's toes. Moreover, he denied that the
imperial treasury stood to gain. While private business worked through
an established system of credits and other arrangements, the govern-
ment lacked these facilities. It must first set up a big staff with high
salaries and beautiful office buildings. It would not be doing business
according to supply and demand but instead would make transactions
on the merit of commissions, distributing favours and contracts accord-
*tog to personal connections. Tseyu argued that, short of forcing down
the price of its purchases by official pressure, through sheer bureaucratic
incompetence die government would buy at a higher price than inde-
pendent business-men were able to get. Therefore it stood to lose.

This so-called government wholesale trade was, therefore, stopped
for a year's further study; then the government came out with a
modified programme under a new name. The division between whole-
sale and retail was not a hard and fast one, and trade bureaus in charge
of the large government-run stores were established in big cities such
as Chengtu, Canton, and Hangchow Another government grant of a
million dollars from the national treasury and $870,000 in the local
currency of the capital was allocated for the development of these
%ade bureaus. The reasons advanced for their establishment were that
"the country's goods had fallen into the hands of'capital monopolists"
and that "the prices of goods fluctuated from time .to time because of
capitalist manipulations; in order to rule the country peacefully, one
should take away the wealth from the rich and give it to the poor".
A very capable official was put at the head, and the more profits he was
able to report to the government, the more capable he was considered
to be. This Lu Chiawen became a kind of trade dictator of the
country, having monopoly control of die small business-men. The rules